California's private health insurance exchange approved

SACRAMENTO, CA - Pamela Malone wishes she had health insurance. The student said a community clinic isn't giving her adequate orthopedic care.

"Hopeless. Sometimes it's so frustrating, and I don't know what to do," Malone said.

An answer for Malone and millions of other uninsured Californians may be a year away under the federal Affordable Care Act.

The Obama administration just gave approval for California and six other states to begin setting up a Health Benefits Exchange, an online marketplace called Covered California where consumers can buy private coverage.

"The decision is a big milestone," Covered California Executive Director Peter Lee said. "This says the federal government has looked at our plan and said we're good to go."

The approval opens the door for health insurance companies to start bidding for a place on the exchange. Plans are supposed to be affordable because they'll be competing for more customers, even those with pre-existing conditions. Depending on income level, federal subsidies will be available to help many low and middle income Californians pay for the mandated coverage.

"We do know you'll get as good or better price through Covered California whether you get a subsidy or not, as you would possibly get on the market," Lee said.

Lee added that the price will be good and the coverage, "It's going to be great coverage."

Out of the more than 7 million uninsured Californians, the state hopes to expand coverage at first to at least 2 million through the exchange. The aim is to set up enrollment in October for plans to start in January.

Though prices are still unknown, skeptics worry about the cost of mandated coverage and how much the financial penalties will be for those who don't have insurance and chose not to get it.

"Let's say insurance is $221 a month. The penalty is $90 a month," Healthcare Advocate Randy Hicks said. "Think about it. Think about what you'd rather pay."

But Malone is crossing her fingers the exchange will cover her medical needs.

"I have hope that it will," Malone said. "I have hope in our government."